The document discusses Just-in-Time (JIT) manufacturing and Material Requirements Planning (MRP). It describes the key concepts and elements of JIT, including continuous improvement, eliminating waste, good housekeeping, setup time reduction, and kanbans. The advantages of JIT inventory systems are lower costs, less waste, and higher customer satisfaction. Potential disadvantages include disruptions in the supply chain if suppliers fail. MRP is also discussed as a production planning system to ensure materials and products are available when needed at the lowest possible levels. The document provides an overview of JIT and MRP concepts.

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Unit II: Just-in-Time - JIT – total quality strategies for manufacturing success and WCM
model, MRP and MRP II, developments, gaining competitive edge, advantages and
implementation issues.
JIT
Just-in-time (JIT) manufacturing, also known as just-in-time production or the Toyota
Production System (TPS), is a methodology aimed primarily at reducing times within production
system as well as response times from suppliers and to customers. Its origin and development
was in Japan, largely in the 1960s and 1970s and particularly at Toyota.
The just-in-time inventory system is a management strategy that aligns raw-material orders from
suppliers directly with production schedules. Companies use this inventory strategy to increase
efficiency and decrease waste by receiving goods only as they need them for the production
process, which reduces inventory costs. This method requires producers to forecast demand
accurately.
It originally referred to the production of goods to meet customer demand exactly, in time,
quality and quantity, whether the `customer' is the final purchaser of the product or another
process further along the production line
JIT concept

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 Elements of JIT include:
 Continuous improvement.
o Attacking fundamental problems - anything that does not add value to the product.
o Devising systems to identify problems.
o Striving for simplicity - simpler systems may be easier to understand, easier to
manage and less likely to go wrong.
o A product oriented layout - produces less time spent moving of materials and parts.
o Quality control at source - each worker is responsible for the quality of their own
output.
o Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
o Preventative maintenance, Total productive maintenance - ensuring machinery and
equipment functions perfectly when it is required, and continually improving it.
 Eliminating waste. There are seven types of waste:
o Waste from overproduction.
o Waste of waiting time.
o Transportation waste.
o Processing waste.
o Inventory waste.
o Waste of motion.
o Waste from product defects.
 Good housekeeping - workplace cleanliness and organisation.
 Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is
1item. Multi-process handling - a multi-skilled workforce has greater productivity,
flexibility and job satisfaction.
 Levelled / mixed production - to smooth the flow of products through the factory.
 Kanbans - simple tools to `pull' products and components through the process.
 Jidoka (Autonomation) - providing machines with the autonomous capability to use
judgment, so workers can do more useful things than standing watching them work.
 Andon (trouble lights) - to signal problems to initiate corrective action.
 Just-in-Time Inventory System Advantages
JIT inventory controls have several advantages over traditional models. Production runs remain
short, which means manufacturers can move from one product to another easily. This method
reduces costs by minimizing warehouse needs. Companies also spend less money on raw
materials because they buy just enough resources to make just the ordered products and no more.
Just-in-time manufacturing keeps stock holding costs to a bare minimum. The release of storage
space results in better utilization of space and thereby bears a favorable impact on the rent paid
and on any insurance premiums that would otherwise need to be made.

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 Just-in-time manufacturing eliminates waste, as out-of-date or expired products; do not enter
into this equation at all.
 As under this technique, only essential stocks are obtained, lessworking capital is required to
finance procurement. Here, a minimum re-order level is set, and only once that mark is reached,
fresh stocks are ordered making this a boon to inventory management too.
 Due to the aforementioned low level of stocks held, the organizations return on investment
(referred to as ROI, in management parlance) would generally be high.
 As just-in-time production works on a demand-pull basis, all goods made would be sold, and
thus it incorporates changes in demand with surprising ease. This makes it especially appealing
today, where the market demand is volatile and somewhat unpredictable.
 Just-in-time manufacturing encourages the 'right first time' concept, so that inspection costs
and cost of rework is minimized.
 High quality products and greater efficiency can be derived from following a just-in-time
production system.
 Close relationships are fostered along the production chain under a just-in-time manufacturing
system.
 Constant communication with the customer results in high customer satisfaction.
 Overproduction is eliminated when just-in-time manufacturing is adopted.
 System Disadvantages
The disadvantages of JIT inventories involve disruptions in the supply chain. If a raw
materials supplier has a breakdown and cannot deliver the goods on time, one supplier can shut
down the entire production process. A sudden order for goods that surpasses expectations may
delay delivery of finished products to clients.
Just-in-time manufacturing provides zero tolerance for mistakes, as it makes re-working very
difficult in practice, as inventory is kept to a bare minimum.
 There is a high reliance on suppliers, whose performance is generally outside the purview of
the manufacturer.
 Due to there being no buffers for delays, production downtime and line idling can occur which
would bear a detrimental effect on finances and on the equilibrium of the production process.
 The organization would not be able to meet an unexpected increase in orders due to the fact
that there are no excess finish goods.
 Transaction costs would be relatively high as frequent transactions wouldbe made.
 Just-in-time manufacturing may have certain detrimental effects on the environment due to the
frequent deliveries that would result in increased use of transportation, which in turn would
consume more fossil fuels.

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Total quality strategies for manufacturing success and WCM model
Manufacturing excellence through value added manufacturing
• Value added manufacturing- eliminating wastes suggested by Hall 1987.
• Three overlapping categories of work
1. Total quality control
2. Just in time
3. Total people involvement
Strategies for Improving Quality Management in Manufacturing
Quality is the one attribute any manufacturer cannot hide – it screams who they are louder than
any marketing campaign or PR strategy. Nothing says more about a manufacturer than how they
prioritize quality management in manufacturing and information, intelligence, systems and
processes necessary to excel in this critical area. In service industries, the higher the quality and
more consistent a customers’ experience the higher the profitability of a business.
Manufacturers who choose to embed quality deep into their enterprises, doing the hard work of
making it a core part of their DNA over time see the following benefits:
 Reduced manufacturing costs attributable to less material waste;
 Greater efficiency of tools and manufacturing equipment;
 Greater optimization of skilled workers’ time and talents;
 Improved supplier quality;
 Improved traceability across the entire production process;
 Continual reductions in non-compliance.
Of the many strategies manufacturers are using for improving quality management performance,
the following five are delivering solid, long-term results:
1. Creating and reinforcing a strategic framework of quality that permeates every
aspect of a manufacturer’s value chain is essential. Taking a piecemeal, incremental
approach to quality management leads to information silos and fuels political
infighting over quality performance, creating more problems than it solves . A unified
framework of quality management that integrates common practices, TQM, JIT and
TPM techniques at a minimum is essential
2. Supplier quality management objectives need to be defined before procurement
and strategic sourcing is undertaken and integrated into inbound inspection,
traceability and audits. Manufacturers who make the deliberate decision to invest in
supplier quality management from procurement and strategic sourcing through
fulfillment have greater control over cost of quality and greater visibility into overall
manufacturing quality performance

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3. Quality Control and compliance departments need to get beyond just reacting to
quality management problems and take a much more proactive, strategic
approach instead
4. Measurements of quality performance are the baseline that supplier management,
production, fulfillment and services measure themselves by. Manufacturers who
improve the most on the most critical dimensions of quality are using metrics and key
performance indicators (KPIs) to evaluate the entire value chain, not just selected
functional. The most valuable metrics according to studies conducted of quality
metrics’ impact on profitability include defect rates, cost of rework, warranty expenses,
after-sales service costs, opportunity costs and costs of good and bad quality.
5. Quality process control programs need to be based on metrics and KPIs that
serve as guard rails to keep quality management on track to meeting and
exceeding customer requirements first.
The most widely known WCM models include:
1. Schonberger's model (1986).
It is based on the set of good practices written in the form of rules. The WCM status can be
achieved by any of the two parallel paths: the quality path, and the JIT production path. Hence

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the presence of concepts, such as: TQC (Total Quality Control), JIT (Just in Time), TPM (Total
Productive Maintenance).
• Richard Schonberger, a leading manufacturing consultant, created the term “world-class
manufacturing.”
• To achieve world-class status, companies must change procedures and concepts, which in
turn lead to transforming relations among suppliers, purchasers, producers and customers.
 Enterprise automation
 manufacturing innovators
 market share,
 operate at peak efficiency and
 exceed customer expectations
2. Howang’s model
• In this model the establishment of WCM relies on the establishment of four systems:
1. Just-in-time (JIT),
2. Total Quality control (TQC),
3. Computer Integrated Manufacturing (CIM), and
4. Total Preventive Maintenance (TPM).
All the systems depend directly on the cooperation of the employees. In other words, the
effective combination of the four factors needs good, educated loyal employees, who look for
ways to make themselves and their courses of action better.
3. Hall's model (1987), which is based on three pillars: TQC, JiT Manufacturing, TPI (Total
People Involvement), and in practice is often referred to as the value-added manufacturing
model.
3. Gunn's model (1987). It is based on the set of good practices grouped in three pillars: CIM
(Computer Integrated Manufacturing), TQC, JiT Production.
4. Maskell's model (1991).
It is based on the set of good practices grouped in four pillars: TQC, JiT, WM (Workforce
Management), FP (Flexible Production).

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• According to him WCM generally includes
1. A new approach to product quality
2. Just in Time
3. Change in the way in which work force is managed
4. A flexible approach to customer requirements
5. Dr.Ross’ model of WCM
Ross model is obtained the fundamental definition of WCM. It considers the nature and
substance of WCM as continuous improvement of the organization's key resources. Hence, this
model is introduced, information technology, human resources and cultural structure as a
strategic resources. The functional structure of the company will attempt to improve this
resource. The Important point in this model is the role of IT as a liaison between a strategic
resource and the functional structure of the company. Although it is important in organizations to
define the role of information technology. However, this model is not clearly articulate its role as
one of the causes of World Class Manufacturing (WCM). Also, in this model there is ignored
concepts such as: competition, organization’s competitive advantages and globalization that form
the theoretical foundation of WCM. The model is presented below , before anything else,
suggests the existence causes of WCM as the cornerstone and foundation of the building of
WCM and then after the competition and emphasis on core competencies , mentions creating
competitive advantages as Provocatives of world-class manufacturing and then four pillars: lean
and continuous production, and total quality management (WCM), developing and implementing
of business excellence models and assess organizational performance is essential for achieving
excellence and consequently, promotion of the structure of WCM.
Model Ross for WCM (Soltanzadeh 2009)
Representing a model, he answers the question "why some companies, establishing new
productive technologies make no progress?" In his idea, there are four critical elements in
establishing WCM:
a) Technology

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b) Culture and structure
c) Information
d) Employees.
His studies show that the majority of companies have focused on technology, and ignored the
other factors; just those companies which have focused on these four elements altogether have
made progress.
In culture and structure, he emphasizes the necessities of organizational re-designing new
channels of transmitting information, and distribution. This model needs the roles and skills that
make the organization's management establish educational opportunities for employees during
the work.
It needs a new operational culture in relation to team work, elimination of wastages, production
with added value, on-the-job training (OJT), commitment to total quality, and omission of
organizational barrels. About information, there is an emphasis on the foundations like the
vitality of the company's access to the flow of information
6. The suggestive model
This model with an inductive point of view, analyzes the world sourcing maturity, world
operation maturity, world delivery maturity and world strategic planning maturity in the
subordinate companies of an industry.
After that by combining the data, the WCM maturity in each of these companies will be
extracted. Finally, by adding up the maturity of these subordinate companies, the WCM maturity
of an industry will be calculated. Therefore, this model works hierarchically, and is represented
in two scales: company and industry. It is necessary to mention that by world sourcing, it is
meant providing the essential primary material from suppliers, by world operation, assembling
and making the product, and by world delivery, presenting the products to the customers. In the
end, world strategic planning as a supporter of sourcing, operation, and delivery is shown
7. Sharma and Kodali's model (2008). It is based on the set of good practices grouped in four
pillars: TQM (Total Quality Management), LM (Lean Manufacturing), TPM, JiT, called also the
ME/WCM model (ME - Manufacturing Excellence).
8. Nachiappan et. all model (2009). It is based on the set of good practices grouped in three
pillars: TPM, 6S (Six Sigma), LM.
9. Gandhi et. all model (2011). It is based on the set of good practices grouped in four pillars:
LM, FCIM (Flexible Computer Integrated Manufacturing), AM (Agile Manufacturing), I&RD
(Innovation and R&D).
10. Okhovat et. al model (2012). It is based on the set of good practices grouped in two pillars:
L6S (Lean Six Sigma), TPM.
11. Dudek (2013). It is based on the set of good practices grouped in three vertical pillars: TPM,
L6S, AM, and two horizontal pillars: TFM (Total Flow Management) and TSM (Total Service
Management) [1].

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All of the presented contemporary models (since 2008) are based on the classic system of two
pillars: technical and managerial. Technical pillars are sets of organizational guidelines in the
most important production areas, responsible for so-called production adaptivity. Managerial
pillars are a complement to the technical-area pillars. The creation of individual world class
manufacturing systems involves the definition and selection of, most often, ten basic technical
and managerial pillars from the set of the available areas of potential improvements.
MRP and MRP II
MRP I
Material requirements planning (MRP) is a production planning, scheduling,
and inventory control system used to manage manufacturing processes. Most MRP systems
are software-based, but it is possible to conduct MRP by hand as well.
An MRP system is intended to simultaneously meet three objectives:
 Ensure materials are available for production and products are available for delivery to
customers.
 Maintain the lowest possible material and product levels in store
 Plan manufacturing activities, delivery schedules and purchasing activities.
MRP is especially suited to manufacturing settings where the demand of many of
the components and subassemblies depend on the demands of items that face external demands.
Demands for end items are independent. In contrast, demand for components used to
manufacture end items depend on the demands for the end items. The distinctions between
independent and dependent demands are important in classifying inventory items and in
developing systems to manage items within each demand classification. MRP systems were
developed to cope better with dependent demand items.
The three major inputs of an MRP system are the master production schedule, the
product structure records, and the inventory status records. Without these basic inputs the MRP
system cannot function.
The demand for end items is scheduled over a number of time periods and recorded
on a master production schedule (MPS). The master production schedule expresses how much of
each item is wanted and when it is wanted. The MPS is developed from forecasts and firm
customer orders for end items, safety stock requirements, and internal orders. MRP takes the
master schedule for end items and translates it into individual time-phased component
requirements.
The product structure records, also known as bill of material records (BOM),
contain information on every item or assembly required to produce end items. Information on
each item, such as part number, description, quantity per assembly, next higher assembly, lead
times, and quantity per end item, must be available.
The inventory status records contain the status of all items in inventory, including
on hand inventory and scheduled receipts. These records must be kept up to date, with each
receipt, disbursement, or withdrawal documented to maintain record integrity. MRP will

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determine from the master production schedule and the product structure records the gross
component requirements; the gross component requirements will be reduced by the available
inventory as indicated in the inventory status records.
• It is a production planning process that starts from the demand for finished products and
plans the production step by step of subassemblies and parts.
• Materials Requirements Planning (MRP) is a set of techniques that takes the Master
Production Schedule and other information from inventory records and product structure
records as inputs to determine the requirements and schedule of timing for each item.
Purpose of MRP
• Control inventory levels
• Assign operating priorities
• Plan capacity to load the production system
MRP PROCESS
1. Exploding and Offsetting
2. Gross and Net Requirements
3. Releasing Orders
4. Low level Coding and Netting
Exploding and Offsetting
Lead time – it is the time needed to perform the process. It includes order preparation, queuing,
processing moving receiving and inspecting time as well as any expected delays.
• Exploding the requirements – it is the process of multiplying the requirements by usage
quantity of each item and recording the appropriate requirements throughout the product tree.
• Offsetting – it is a process of placing the exploded requirements in their proper periods based
on lead time.

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Gross and Net Requirements
Gross Requirement - Total expected demand of the product.
• Net Requirements - Actual amount needed in each time period.
Net Requirements = Gross Requirement – available inventory
• Planned on hand - Expected inventory on hand at the beginning of each time period.
• Planned-order receipts - Quantity expected to received at the beginning of the period
• Planned-order releases - Planned amount to order in each time period
Releasing Orders
Releasing an order – means authorization is given to buy the necessary material or to
manufacturing of required component.
• Scheduled Receipts – are orders placed on manufacturing or on a vendor and represent a
commitment to make or buy.
• Now, considering Scheduled Receipts,
Net Requirement = Gross Requirement – Scheduled Receipts – available inventory
Low level Coding and Netting
Netting – is a process in which any stock on hand is subtracted from the gross requirement
determined through explosion, giving the quantity of each item needed to manufacture the
required finished products.
• Low Level Code – is the lowest level on which a part resides in all bills of material.
Low level codes are determined by starting at lowest level of bill of material and working up,
recording the level against the part. If part exists on higher level, its existence on the lower level
is already recorded.
BENEFITS OF MRP
Keep inventory levels to a cost-effective minimum.
• Keeps track of inventory that is used.
• Tracks the amount of material that is required.
• Set safety stock levels for emergencies.
• Determine the best lot sizes to fulfill orders.
• Set up production times among the separate manufacturing stages.
• Plan for future needs of raw
DRAWBACKS
Inaccurate information can result in mis-planning, overstock, under-stock, or lack of appropriate
resources.

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• The inaccurate master schedule will provide wrong lengths of time for production .Hence
affecting planning.
• MRP systems can be costly and time-consuming to set up.
MRP II
Manufacturing Resource Planning (MRP II) embeds additional procedures to address the
shortcomings of MRP. In addition, MRP II attempts to be an integrated manufacturing system by
bringing together other functional areas such as marketing and finance. The additional functions
of MRP II include forecasting, demand management, rough-cut capacity planning (RCCP), and
capacity requirement planning (CRP), scheduling dispatching rules, and input/output control.
MRP II works within a hierarchy that divides planning into long-range planning, medium range
planning, and short-term control.
• Manufacturing resource planning (MRPII) is defined as a method for the effective
planning of all resources of a manufacturing company. Ideally, it addresses operational
planning in units and financial planning.
• This is not exclusively a software function, but a combination of people skills, dedication
to data base accuracy, and computer resources. It is a total company management concept
for using human resources which is used more productively

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BENEFITS OF MRP II
• More efficient use of resources
Reduced inventories
Less idle time
Fewer bottlenecks
• Better priority planning
Quicker production starts
Schedule flexibility
• Improved customer service
Meet delivery dates
Improved quality
Lower price possibility
• Improved employee moral
• Better management information
DISADV
• Error Due To Poor Information
• Use of averages